8 ways you can support your employees during a cost-of-living crisis.

We are all aware by now that we are in the midst of a cost-of-living crisis. With all the doom and gloom going on in the world right now, it seems like a bit of a kick in the teeth that cheese now costs a fiver and a Freddo costs 30p (may not seem like a lot, but that’s a 200% increase since the ’90s).

Jokes aside, a record number of households have experienced the largest fall in real-term income since the 70s, causing a huge amount of finance-related stress and anxiety.

According to the CIPD, one in four employees say money worries impact their ability to do their job, while the CEBR reported that 13 million working days a year are being lost because of employees’ poor financial well-being. This reduced productivity caused by money worries costs British businesses an estimated £6.2 billion a year.

So, what are some ways that you can support your employees during this difficult time and, in turn, protect your business?

Here are my 8 tips below:

1. Pay a real living wage.

It is no secret that low-income houses have been hit the hardest by rising inflation; this is primarily because they are using a bigger proportion of their take-home income on food and energy bills, with less wiggle room to manage the higher costs overall. Research done by UK charity Crisis found that these families could be forced to miss the equivalent of at least one day of both food and heating per week to keep a roof over their heads. The most obvious way to help with the cost-of-living crisis is with pay – either paying a real living wage or an increase in salaries. However, businesses are not immune to the rise in the cost of fuel and energy, and therefore salary increases may not be feasible – but never forget that your employees are your biggest asset. If you can afford to pay them more, do.

The “real living wage” (which is higher than the mandatory national minimum wage) is an independently agreed amount based on what people really need to earn to live and is now estimated to be being paid voluntarily by nearly 10,000 UK employers. (This number has almost doubled since the start of the Covid-19 pandemic).

2. Salary exchange schemes.

Salary exchange schemes can be used for non-cash benefits as a way of increasing employees take home pay. Things like purchasing a bicycle through a bike-to-work scheme or childcare vouchers can also be paid for by salary sacrifice. This reduced salary is then used to calculate the amount of NI and income tax that the employee pays. You as a business also benefit by reducing the amount of NI they pay, as well as also providing employees with the means to reduce their commuting or childcare costs.

3. Health cash plans.

You can implement Health cash plans to assist with the cost of prescriptions, dental, and eye care – and you can do this from as little as £4.33 per month per employee!
As well as receiving cashback on medical expenses, employees also have access to telephone helplines for financial, legal, and mental health support. This not only helps reduce healthcare costs that employees might otherwise go without as a non-essential spend but can also reduce staff sickness absences.

4. Mental health support.

It has become vital that employees are offered mental health support; this includes support for finance-related anxiety. Make sure you have good support in place for anyone who needs it! And also to make sure employees are aware of the services being offered to them and how best to benefit from them.

Did you also know that mental health, combined with musculoskeletal injuries, make up more than 40% of all sickness absences? An Early Intervention Scheme can provide fast-track access to counselling services without a GP referral, and a lot of group life insurance/group income protection policies include employee assistance programmes.

5. Group income protection.

In these uncertain times, having concerns about the security of your income can be the cause of anxiety. By providing Group Income Protection (GIP) insurance, you can give your employees peace of mind that a percentage of their salary will still be paid even if they are off work because of illness or injury. GIP insurance also provides many additional services to support your employees - including rehabilitation services, like counselling and physiotherapy. They can also provide partial benefits if an employee comes back to work on a part-time basis. Group Critical Illness cover pays an employee a lump sum should they, or their immediate family, be diagnosed with a critical illness – and whilst you hope your employees will never need to make a claim on these policies, knowing that they are there can offer them peace of mind.

6. Retail discounts and membership schemes.

Retail discounts and membership schemes are a great way of supporting the local economy and making employees’ money go further. You could canvass local businesses to offer their services cheaper and, therefore, potentially attract more customers, or there are companies like Reward Gateway and Perkbox that provide tailor-made packages to businesses offering a wide range of discounts for shops and services.

Whatever you choose to do, it is definitely worth speaking to your employees first to find out what discounts would help them out the most.

7. Emergency funds and crisis loans.

As a business, you might decide to offer emergency funds and interest-free crisis loans to employees who are in really difficult situations. By doing so, it means that your employees don’t need to take out expensive payday loans – helping to alleviate financial stress.

8. Buy back unused annual leave.

You can offer a trade-in scheme for unused holiday, where your employees can receive money for any unused annual leave, instead of it carrying over to the following year. Whilst employees should always be encouraged to use and enjoy their annual leave, receiving the extra money for a few days of unused leave could be a significant help.